I would assume the interview was over if they mentioned other motivated candidates

Maybe a cultural difference considering I'm in Asia but in roughly 1/3 of the follow up interview I've experienced, the HR / manager mentioned there were other motivated candidates. Most of the times it came after I expressed I was hesitant after being low balled hard in term of income.

Could be a cultural difference, but still think it sounds like they signal that something is non negotiable, either you accept it or leave.

Assuming they've actually made an offer, I agree that it sounds like something they're firm on and, probably, while they might indeed be willing to hire you, they're perfectly fine with their fallbacks.

Retort with “well I hope there’s other motivated candidates, if there wasn’t it means this place sucks”

Perhaps motivated also implies “just as talented as you” which might give you some room to explore. Ask what they have that makes them looks as good as you. That could work to your advantage if they stumble on it or are super vague “just as many years of experience “ means nothing. 12 years or 6 sessions of 2 years ago experience?

Course it could also blow up in your face as the recruiter talks themselves into hiring the other person.